New traits of seed buying

Changes are coming in the way you buy seed. That's because the seed itself is changing. Through genetic engineering, or in some cases conventional breeding, much of the seed marketed next year will contain special traits to make it resistant to pests or worth more at market.

Thirty-two percent of Pioneer's seed corn lineup in 1999 will contain value-added traits, compared with 19% in 1998. At Golden Harvest, 75% of its seed corn line will have a value-added trait, up from 15% in 1998. At ExSeed Genetics, a company formed in 1994, value-enhanced seed is all that is made.

Many of these trait seeds you've already seen, probably even used. Traits like Bt, Roundup Ready, IMI, LibertyLink, STS, high-oil, white, and waxy. But you'll see them in larger supply and in more elite hybrids next year. And there will be new combinations of these traits, called stacks, to provide several benefits in a single hybrid.

You'll see some traits for the first time in 1999, including:

*A stacked Bt and TopCross high-oil corn hybrid by Pioneer.

*A low-phytate corn that makes phosphorous in corn more available to the animal and, at the same time, cuts the amount of phosphorous in the waste to reduce water pollution. Pioneer will launch it in a limited East Coast market area.

*A new soybean variety that is resistant to Liberty herbicide and a new Bt corn with a different mode of action to help combat resistance to older Bt technology, both by AgrEvo.

Faster adoption. The goal of the seed industry right now is to provide new traits in more hybrids, faster. Speed is key. And competition is fierce. ExSeed Genetics claims it can produce a hybrid in half the time that the traditional process took, typically seven to nine years, through a special system that speeds up the natural selection process.

These changes in development put pressure on you as a buyer to consider all the options.

"There are so many new hybrids coming down the pipe now," says Burdell Kuhl, corn and soybean farmer from Worthington, MN. "Hybrids don't stick around nearly as long."

He says he used to plant the same hybrid for eight or nine years. "Now if something is three or four years old, there's probably something better out there."

Seed companies report that farmers are adopting hybrids faster than before. "In the past farmers wanted two or three years' worth of data before they would try a hybrid," says Chuck Lee, corn products manager at Golden Harvest. "Now, some are willing to accept a year's worth pretty readily."

Tracy Klingaman, agronomic traits product manager for DeKalb, agrees, adding that Bt corn is a classic example. "Bt offers tremendous value, and as a result farmers have adopted it very rapidly," he says. "The same is true for Roundup Ready soybeans. Within a few years it has gone from just a fledgling market share to tremendous market share throughout the entire U.S. soybean production area."

Less loyalty. Lee says an even bigger change is that farmers who previously bought from one company repeatedly are now going elsewhere to get the trait they want.

Roundup Ready beans is an example of that, he says. "A lot of companies ran out of Roundup Ready beans, and farmers weren't afraid to flat out switch companies to get them. So I think a little brand loyalty was sacrificed to technology."

In the future, many regional seed companies will not be able to provide the entire spectrum of new traits that major companies offer and, instead, will have to specialize. Mike Stephenson, president of Great Lakes Hybrids, predicts, "There are going to be a lot of niche markets, and seed companies are going to have to pick and choose what they decide to market."

Some companies have already done that with high-oil corn, he says. "It's very clear in the marketplace who those niche players are, and farmers will generally seek them out."

Along those lines, Stephenson says suppliers of end-value traits will need to become more vertically integrated to secure a market for the end-value crop their customers are growing.

More homework. This is another big change brought by new traits. Because not all companies carry a given trait, you will have to go to more sources to find it, Stephenson says. You also will have to learn about the risks involved in planting and managing the seed.

For instance, he says, with Bt corn you need to know how to manage refuge acres to prevent resistance. With herbicide traits, you have to learn how to manage its use so you don't spray the wrong field.

Mark Winkle, pesticide trait marketing manager for Cargill, recommends the Internet as a good source for that information. Most seed companies now have their own Web sites that show what traits they are selling along with how to manage them. Agricultural chemical companies have similar information on their Web sites. For unbiased information, university field days and extension meetings are other good sources.

Earlier bookings. As trait technologies move in and out of production fast, existing product lines become obsolete fast, says Winkle. As a result, it is critical for seed companies not to overproduce.

To better anticipate production levels, companies will want to confirm your buying commitment early by offering discounts if you order by a certain date, similar to early-order programs of the past, Winkle says.

As a new twist, they may start to package their trait technologies over a two- or three-year period and offer an even bigger discount. He says the concept is analogous to a sports contract, where a player commits to one team for a number of years for a predetermined price.

"The key is gauging production levels for specific traits or a combination of traits to better manage inventory levels," he says.

New selection criteria. In the past, yield was the major determinate of which hybrids a farmer selected. But as the industry moves into specialty traits, that focus will shift to the earning potential of a given hybrid, says Kyle Whitaker, corn technology communications manager for Pioneer.

"Yield is going to be more than just bushel in the bin at the end of the year," he says. "It will be, What is my earning potential with this value-added product versus a traditional non-value- added product?"

Pioneer defines earning potential of a hybrid as:

Income or total value = bu./acre yield x (price/bu.-cost/bu.).

"That's a way to look at the total picture," agrees Pioneer's Jerry Harrington. "So yield or the initial price of seed becomes just a factor in a greater formula."

Burdell Kuhl, Worthington, MN, farmer, used those numbers to determine whether to plant high-oil corn in place of the Bt conventional corn he currently grows. "They say high-oil corn yields close to conventional corn, so if you can gain 20 cents or a quarter a bushel, it's a real plus to plant it," he says. "But with the yield bumps we got from Bt corn last year, the Bt outyielded the regular corn."

As a result, he figures he is better off sticking with Bt corn, at least for now. "If the Bt yields 120 bu. and regular corn and high-oil yield 100 bu./acre but I pick up 20 cents in price, I'm still further ahead growing the Bt corn at the regular price."

In the future, farmers will be able to avoid such tradeoffs as more trait combinations become available.

Golden Harvest's Lee says that the single most important question farmers have to ask themselves when buying the new technology is, Will a given trait provide me value?

For example, he says that with specialty feed corn, you need to ask what the yield differential is going to be compared to normal corn. What will the premium be? Who will buy it?

"I think a lot of technology sold to the American farmer will have value and some will have almost no value," he says. "And it's going to be up to farmers to sort out which ones will provide them a value."